Bitcoin’s correlation to gold hits multi-year high

Bitcoin’s (BTC) correlation with gold hit a multi-year high last week and is currently over 50%, surpassing its correlation with US stocks.

In fact, Bitcoin has withstood the current financial industry volatility and increased regulatory uncertainty very well, skyrocketing over 70% YTD, outperforming traditional asset classes as they see “digital gold” as a potential store of value.

Coupled with on-chain statistics indicating an increasing percentage of long-term Bitcoin investors, this could indicate that Bitcoin’s appeal as a haven is on the rise, according to data from Kaiko published April 3.

Gold is climbing 8% since the banking crisis began in March

In particular, both the flagship digital asset and the precious metal experienced significant declines last year. However, gold has also seen a price increase of 8.6% since the Silvergate collapse on March 8 led to the banking crisis, bringing the price closer to its all-time high of $2,000, reached shortly after the start of Russia’s invasion of Ukraine.

As Kaiko noted back in October:

“After benefiting greatly from the conflict between Russia and Ukraine in the first quarter of the year, gold has lost all gains and is currently down 10% YTD. Bitcoin has also fallen by double digits this year, dragged down by global monetary policy.”

On top of that, “gold has not acted as a safe haven, i.e., an asset expected to retain or increase in value during periods of economic downturn,” despite “core inflation remaining persistently high.”

Bitcoin and Technology Stocks

Meanwhile, big macro investors have already largely de-risked, which may explain the weakened connection with tech stocks.

While the Nasdaq 100 has officially entered a bull market (up 20% or more from December lows), volatility has eased. After FTX’s collapse, the difference between crypto and US stock market volatility has become wider and wider.

As market depth has been low for more than a month, increased BTC volatility can be partially attributed to lack of liquidity. As Binance, the largest and most liquid exchange, faces regulatory restrictions that could increase risk aversion among market participants, this situation is unlikely to change.

Kiyosaki says to buy Bitcoin and gold

Amid concerns over the potential economic collapse Robert Kiyosaki, the author of the best-selling personal finance book “Rich dad poor dad,” has warned about the state of the global economy, citing US Federal Reserve decisions as the catalyst for an impending market crash.

Kiyosaki believes there are options to cushion investors against the effects of a possible economic crash, highlighting Bitcoin and precious metals, such as gold and silver, as valuable assets to protect against rising inflationary pressures.

Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.